Birth Rate vs. Pay Rate

Changes in the child allowances during the years 1994 to 2007 affected the birth rates among hareidi-religious and Arab women, say researchers.

Hana Levi Julian, 15/12/09 13:43 | updated: 14:31

Increasing or downsizing the birth rate?

Israel news photo: (illustrative) Flash 90

Changes in the child allowances during the years 1994 to 2007 negatively affected the birth rate among hareidi-religious Jews and Arabs, but did not affect the rate among national religious and secular Jews and Druze, according to a new study released this week.

The research was conducted jointly by Dr. Daniel Gottlieb and Esther Tolidano of the Research and Planning Division of the National Insurance Institute (Bituach Leumi) and Noam Zussman and Roni Frish of the Bank of Israel's Research Department.

The findings of the study showed that stipends granted for the fourth through seventh child at a rate of NIS 500-560 ($130-$150) per month, which was the average amount from 1994 to 2004, appeared to increase the fertility rate of Arab women from six to seven percent. It also appeared to increase the birth rate of hareidi-religious women by three percent, compared with prior statistics from a point at which the women were not receiving any stipends. In the general population, granting child stipends increased the birth rates across the board by some two percent.

The research also showed that full cancellation of benefits for children would drop the total birth rate by about 0.2 percent in the hareidi-religious population, approximately one child in every five families. The birth rate among the Bedouin Arab population in the south would also decline, by about 0.4 percent, or less than two children out of every five families, if child stipends were to be eliminated. The birth rate among the Druze population, however, would remain unchanged.

During the study a downward trend in the birthrate was recorded in all populations except among non-hareidi-religious Jews. Cuts in the child stipends in 2004 and 2007 explain a significant reduction in the number of births among Arab women, and a smaller decline in births among hareidi-religious women, the researchers said.

The authors of the study noted a number of caveats, including the fact that there were limited controls for educational level, social, cultural and religious factors. Moreover, the study was conducted soon after a cut in child allowances, making it difficult to assess whether the data reflected a permanent or temporary change.

It is unclear, they said, whether the decline in the birthrate will continue in the long term, thus reflecting a general reduction in the fertility rate in these populations, or whether the data reflect, at least in part, a gap in births between 2004 and 2007, rather than a reduction in the birth rate.

The authors noted in their summary that child allowances directly reduced poverty in the short term, and therefore increased the future ability of children in poverty-stricken families to earn a living for themselves. However, they wondered whether such stipends might also reduce the supply of working mothers in society, and increase the birthrate among the poorest populations, possibly causing less family income per capita, and perhaps damaging future earning capacity of the children.

The research indicated that the impact of cuts in child allowances on long-term poverty, through its reductions in the birth rate, was minimal to moderate at best, and that its influence in other areas required further study.